Blaine Luetkemeyer: A community banker inside Congress

Missouri Congressman Blaine Luetkemeyer is a champion for small bankers in Washington. And that’s because he’s been one of them.

Over his distinguished private career before arriving in Congress in 2008 to represent his home state of Missouri, Mr. Luetkemeyer spent 30 years working in the financial services industry as a state banking examiner and a community banker.

That experience, he says, gave him a keen understanding of the unprecedented burden that excessive government regulation can have on lending, financial services and access to money for everyday working Americans and small businesses.

He’s taken that experience to Washington to champion regulatory relief and smarter policies to help keep community banks as an essential engine of economic development on Main Street.

“I have seen firsthand the important role that local financial institutions play in helping families realize the American dream,” he says. “We live in a world where banking is becoming more concentrated and lending is constrained.

“That is why it is important to provide some regulatory relief to the small, hometown institutions that have served our local communities well and did not contribute to the financial crisis of 2008.”

For years, this Missouri Republican has championed legislation designed to reduce unnecessary or duplicative regulatory burdens on community bankers and other small lending institutions.

One of his highest priorities has been winning passage of H.R. 1233, the Community Lending Enhancement and Regulatory Relief Act, a bill that Mr. Luetkemeyer is sponsoring to relieve regulatory burdens on community-based financial institutions.

Among its many feature, the bill provides an exemption from the Gramm-Leach-Bliley Act’s annual notice requirement for banks that have not changed privacy policies and only share personal information within the statutory exceptions. That provision alone is estimated to save small banks millions a year in mailing. The bill also would also lengthen the exam cycle for banks that are well managed.

The legislation also includes several provisions to increase home lending opportunities in small communities across America, such as changing the Qualified Mortgage (QM) safe harbor requirements to include loans originated and retained in portfolio for the life of the loan.

Similarly, in July, the House passed Mr. Luetkemeyer’s legislation, H.R. 432, that reduced duplicative regulatory burdens for advisers of Small Business Investment Companies (SBICs), which help arrange funding for mom-and-pop businesses all across America.

“There are 28 million small businesses in America, and bills like H.R. 432, reduce regulatory burdens so that long term investments can be made in our small businesses and communities,” he explained earlier this month.

In March, he re-introduced legislation called the Systemic Risk Designation Improvement Act, which require government regulators to base their regulation of financial institutions on risk factors rather than arbitrary considerations like asset size.

“This legislation supports economic growth in the country because not only does it allow our community and regional banks to lend without certain burdens of lending, but it more closely bases the regulation of financial institutions on risk rather than arbitrary asset size,” he explained at the time. “After decades of being in the community banking and insurance businesses, I know firsthand the importance of creating standards that account for risk and the varying structures of small, mid-size, and large financial institutions.

Finally, as chairman of the House Financial Services Subcommittee on Housing and Insurance, Mr. Luetkemeyer helped lead the charge against Operation Chokepoint, an unprecedented regulatory assault by the Obama administration on certain industries, like gun makers, designed to cut off their access to financial services by imposing undue hardships on the banks that serviced them.

While the FDIC, the Justice Department and other regulatory agencies eventually apologized for the operation, Mr. Luetkemeyer wanted to make sure the program, or anything like it, could not be revived ever again.

So earlier this year he sponsored an amendment to the annual Commerce, Justice, and Science appropriations legislation prohibiting the expenditure of federal funds on Chokepoint-like activities. The amendment passed the House in June.

“My colleagues and I will continue to ensure DOJ and FDIC enforcement actions are focused on actual threats and risks and not politics and ideology as we continue to move forward with the fight to end this illegal program once and for all,” he explained at the time.